Economists' Outlook

Housing stats and analysis from NAR's research experts.

National Baby Bust is Mirrored Among Home Buyers

The fertility rate declined in 2019 by 1% overall, which may not seem like a sizeable change until recognizing that the fertility rate is at all-time recorded low for the last 100 years. Fertility rates are defined by the number of births for 1,000 women aged 15-44 (women who are in childbearing years).

This trend is consistent among all racial groups of women. By race, the fertility rate has declined 2% for non-Hispanic white women, 1% for non-Hispanic black women, and 1% for Hispanic women.

Line graph: U.S. Fertility Rate, 1909 to 2019

The trend has been apparent among home buyers as well. Looking at buyers who have children under the age of 18 in the home, the share has declined from 58% in 1985 to just 33% in 2020. This trend has significant implications for home buyers. What is important to a buyer with children will be different than what a buyer needs without children in the home.

Line graph: Home Buyers Who Have Children Under the Age of 18, 1985 to 2020

The location preferences for those with children differ considerably and are often driven by schools. For example, 49% of parents rate quality of the school district, and 49% rate convenience to schools as a high priority. In comparison, just 11% of non-parents rate school quality important when buying, and 7% rate convenience to schools important.

Space is also a premium for buyers with children. For 19% of buyers with children in the home, the top reason to buy a home is for more space, which is true of only 6% of buyers with no children in the home. Parents purchase a home that is typically four bedrooms with 2,200 square feet, while those with no children typically purchase three-bedroom homes with 1,800 square feet.

The question is where will this trend lead? Will fertility rates continue to drop? Will there be a pandemic baby boom? Early indicators suggest the trend of a baby bust is continuing. A year ago, mothers who temporarily left the work force did so at higher rates than fathers and cited two main reasons: work in the service sector drying up, and unpaid domestic household duties such as childcare. For working moms, many made the choice to leave the workforce temporarily to care for their children or older adult relatives. They did so as childcare facilities closed, school went online, and nursing homes became unsafe for relatives. For these women, the idea of adding a new baby to the home may be dampened from both a financial perspective and a time and energy perspective. Additionally, for many women, the idea of having a child during a pandemic could induce fear of doctor visits and birth in a hospital room alone.

For now, we can watch the current trend and the impact to home buying through data in the Profile of Home Buyers and Sellers.